We saw an impressive bounce in the market last week and now it appears to be taking a breather. Will market break through 8500 level!!! Which is most probable scenario and path of least resistance at this juncture?

McClellan Index appears to have changed the direction and is above EMA(59) & MA(100) - suggesting more stocks are advancing than declining in cumulative manner over days.

Daily Nifty chart shows the recent bounce in Nifty which is at present barely above MA(200). Unless Nifty breaks through 8500 level, this correction cannot be considered as over.

Weekly Nifty chart not providing much clues and current bounce in Nifty does not appear to change the trend. It appears to be a normal bounce in a correction.

Market still not out of the woods, hence remain cautious and do not get complacent.What does it mean for our Investments?

Mutual Funds - If still invested in equities then stay invested and ride the correction which could take a while, be patient. But it would be wise to STOP SIP for now until market stabilizes. If in cash/ FDs/ liquid funds then wait for next robust opportunity, NO need to hurry.

Stocks - ONLY invest in strong patterns with good earnings guidance and DO NOT forget to have STOP LIMIT on open positions. When market is in correction, it will drag everything down with it. Check out our trade size calculator to manage your risk along with potential buy candidates watch list.